Tech savy young hires talent Shortage is real for many enterprises
Tech savy young hires talent shortage is widely discussed among CIOs. The shrinking unemployment rate has drained the talent pool in many corporate IT functions and industries, and companies continually complain that they can’t find qualified staff. For Information Technology departments, the problem is different: If they were looking solely for the technical skills they wanted years ago, they would be overwhelmed with candidates. Today, though, such skills are table stakes, and the focus is on finding people who stand out because they have other desired qualities as well.
Given companies’ increasing reliance on data in decision-making, demand is soaring for a demonstrated aptitude for analytics. Even more important for the long-term success of new hires, however, are assorted “soft” skills that allow them to communicate and collaborate with others, as well as influence others’ attitudes and behaviors.
According to some CIO, there is not a shortage of finance talent per se, but there is a shortage of people who have both technical expertise and these additional skills that will enable them to work well inside an organization.
Given this shortage, IT departments are aggressively positioning themselves as employers of choice. And they can’t allow themselves the luxury of easing up on that quest, since their competitors are doing the same thing.
What are CIOs and CFOs looking for
CIOs and CFOs are telling Janco Associates they want Information Technology students who know how important application strategy will be in any IT function and who show a willingness to embrace and explore analytical tools and methods. Students don’t necessarily need to know how to code. Many companies that are successfully hiring young candidates with prowess in analytics are looking beyond traditional sources like business schools and accounting firms.
The problem is that demand for those candidates far outpaces supply. CIO should be looking for people who may not have the desired business background or professional experience but who possess the analytical skills IT pros need now and in the future.
The 36 highly paid CIOs have average base salary is $510,000 with total average compensation of $3.6 million.
Janco has just updated its list of highly paid CIOs for the last year. The data is from public sources including SEC fillings. The data shows that this group of individuals is not only very diverse but also completely integrated in the executive management planning and operational teams.
Interesting findings include:
One quarter of this group of CIOs are women. That is up from less than 10% in 1999.
Just under 1 in five are minorities. This group of CIO is racially diverse and are all well educated
The median base salary $700K while the average base salary is $510K/
The median total compensation $3.3 million and average total compensation is $3.6 million.
All of the CIOs make most of their total compensation from performance bonuses and company stock.
The average tenure is well over 60 months and these individuals have the probability of retiring from these jobs versus being terminated or leaving for greener pastures.
All of the positions are Vice Presidents and most are Executive Vice Presidents. All have either CIO or CTO in their official titles.
Over 60% have been in IT most of their careers. and have advanced to this position.
Over 40% have operational responsibility for areas beyond IT and technology. Technology is integral to the day-to-day operations
All are integrated into the executive and operational management of the enterprises they are in. Typically IT is not in a “silo” isolated from the rest of the company.
Janco and eJobDescription.com has conducted salary surveys of the IT Job market since 1989. The data from this survey has been published in the Computer Industry Almanac, the Wall Street Journal, the New York Times, eWeek, and many other business and industry publications. In addition over the years it has been featured on CNN, the Wall Street Journal, and several national and international media outlets.
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IT spending flat for 2015 as compared with 2015 according to a report published last week. Interestingly the two areas that saw the greatest reduction in spend were equipment (down 5.3% on top of a reduction of 4.6% in the prior year) and communications (down 1.4% and 9.2% in the prior year.
Cumulatively that is over a 10% reduction in both areas. Now when you consider that planning is going on right now for 2017 – what does that imply.
First, there will be pressure for “new” hardware as equipment has not been replaced that is approaching the end of its useful life. Second if that happens there will be further pressure to keep IT salaries down as well as head count.
With that in mind, Janco is in the process of forecasting the net number of jobs in the IT job Market for the remainder of this year.
Last month the forecast was that there would be 76,500 new jobs created this year for the domestic IT job market.
IT Hiring Rebounds in June, but Overall Growth Remains Slow
IT hiring rebounds in June, reversing a steep drop in May (much of which was attributed to Verizon strike by 40,000 workers – 17,000 telecommunication) but signaling continued softness in the technology job market as firms cope with uncertainty from the upcoming U.S. presidential election and the United Kingdom’s decision to leave the European Union.
U.S. employers added 34,200 information technology jobs in June, following a loss of 19,400 positions in May, according to an analysis of Bureau of Labor Statistics data by consulting firm Janco Associates Inc. The June figure is up significantly from the same month a year ago, when 6,800 jobs were added.
About 46,500 IT jobs have been created year-to-date, down from 69,400 at this time last year. Growth in IT jobs hit a five-year low in April, CIO Journal reported.
Janco projects a net decrease in the size of the IT job market this year. The firm estimates 76,500 jobs will be added at year’s end, compared to 112,500 in 2015.
“At the beginning of the year people were much more optimistic,” said M. Victor Janulaitis, Janco’s CEO. Last month’s uncertainty surrounding the upcoming U.S. presidential candidates and questions over the implications of a Brexit scenario prompted many firms to become more cautious across the board. ” Everyone’s saying we’re really slowing down this summer.”
That means companies may not fill IT roles left open by retiring baby boomers and may cut back on contractors and consultants. Unessential technology upgrades without a clear return-on-investment may be tabled for the time being.
The forecast is not without bright spots. Companies have been hiring application developers and designers, Mr. Janulaitis said, although most have been internal. And a survey from Janco this month found that average compensation for all IT professionals has increased to $82,775 in 2016 from $ 82,246 a year ago.
Janco’s employment findings are based on an analysis of a basket of IT-related jobs data drawn from the Labor Department’sBureau of Labor Statistics.
The broader economy also rebounded in June, adding a seasonally adjusted 287,000 jobs. That followed a dismal gain of 11,000 jobs in May.
Janco has just released its IT job market forecast and does not look good. The forecast for 2016 is that 100,800 new IT jobs will be created. That is 12% lower than the number of jobs that were created in 2015 and 2014. In addition, a number of industry analysts are forecasting that a new recession is around the corner. That was magnified with the testimony of the Fed Chairman before Congress. The Chairman said, “… we (Fed) will not raise interest rates in the near term as we are seeing signs of a recession occurring over seas.”
When Janco analyzed the recent employment data provided by the BLS, they found that 5,300 new IT jobs were created in January 2016 versus 15,900 last year at the same time. The CEO of Janco said, “The BLS did reclassify some jobs from the Telecommunication category to the Computer System Design and Related Services, but that was a push and in aggregate the result was that fewer new IT jobs were created. In support of this, our interviews of 47 CIOs in the last few weeks have them being much more pessimistic than they have been as group in some time.
New IT jobs created in 2015 forecast is 160,000 according to research firm
New IT jobs created in 2015 forecast is 160,000 according to Janco – With the completion of the 2015 Mid-Year IT Salary Survey and interviews with over 100 CIO, Janco forecasts that a total of 160,000 new IT jobs will be created in 2015 by the end of the 4th quarter.
Forecast of IT Job Market Growth
Driving that growth is the demand for IT jobs and an overall improvement in the current economic environment
In the short term it looks like companies are looking to hire IT staff, contractors and consultants. For the first time in several months the IT Job Market looks strong.
Based on Janco’s interviews and survey data the following positions are in high demand.
Job Market – DC leads the country with the highest unemployment rate
19 states have unemployment rates of 6.0% or greater in December
Even with the slight improvement in the job market 19 states continue to have high unemployment. California still is at 7% and DC tops the list with a whopping 7.3% rate. When you add in the participation rate in both of these job markets the true unemployment rate is closer to 10%.
States with High Unemployment – 19 States have 6.0% or greater unemployed
Add on to this the increase in the labor force due to the recent actions on illegal immigration and the job market picture is not as rosy as depicted by the overall national unemployment rate.
Labor Force Participation
In December of 2014 the work force participation percentage of all employees (male and female) fell to 62.7% as more individuals left the job market. This more than offset the gain in the number of new jobs created.
During the recession of 2009 – 2013 unemployment in the IT Industry had not been as high as the rest of the United States. Older workers had a higher unemployment rate than your ones. In addition, female high tech employees have not as well as their male counterparts. This is especially true for workers over the age of 55. The unemployment rate for women over the age of 55 for computer and math workers in 2010 was 9.4% versus 8.0% for men.
Labor Force Participation Plummets Labor Force Participation Plummets In April of 2014 the work force participation percentage of all employees (male and female) fell dramatically to 62.8% as 800,000...
Companies are cutting back on security spending as attacks are on the rise
Companies report that cyber-security attacks are on the rise — up 48% in 2013 but spending on information security down by 4% during the same period. Small companies have been cutting their security budgets according to the latest Global State of Information Security Survey.
This is the first drop in security spending in four years. Security spending in small companies (less than $100 million in revenue) fell by 20%, while at medium and large businesses they increased 5%.
Regardless of company size, security spending as a percentage of total IT budget has leveled off at 3.8% and shows no signs of increasing.
Recent high-profile hacker attacks on large and small corporations have highlighted their vulnerabilities. According to industry experts, in 2013 the number of reported security incidents increased 48% to 42.8 million, the equivalent of almost 120,000 attacks a day. The average cost of managing and mitigating breaches is now $2.7 million per incident.
At the same time, the average information security budget declined this year to $4.1 million, from $4.3 million in 2013.
CIOs are presenting IT budget requests for 2015. Small to mid-sized business with fewer than 250 employees are the biggest budget increase requests, while companies with 250 to 999 employees show a decline. Janco Associates surveys continue to show that hiring remains largely flat, with the bulk of the increased budget going to new end-user hardware purchases and, to a lesser extent, new cloud-based and hosted IT services.
CIOs and HR managers are challenged with many issues. Janco Associate’s in its interviews with CIO and corporate executives has identified the top 10 management staffing issues they need to address as we come out of the recession. The top 10 issues are:
IT Staffing 2015 IT staffing 2015 IT staffing companies and researchers released a flurry of information as the first half of the year ended. 2015 is looking great...
IT Hiring Picture Improves IT Hiring Picture Improves One in five chief information officers, based on Janco ‘s interviews with U.S.-based chief information officers, anticipate hiring lower-level staff for...